LEARNING OBJECTIVES After successfully completing this week's content, you will be able to: 1. Describe Benefits of of integrating functional activities via internal information systems. 2. Identify and explain key drivers of supply chain performance and their interrelationships with strategy and other company functions. Project 4. You are a supply chain manager at Frabill, an outdoors equipment manufacturing company in central Wisconsin. Frabill manufactures ice fishing poles, fishing nets, portable ice fishing shelters, and other fishing accessories. Your sales have been steadily increasing. Customers seem to love Frabill's new innovative products. However, expenses are rising more rapidly than income, reducing company profits. Many other managers at the company are pointing to the supply chain as a cause for these increased expenses. They claim inefficiency is the reason for the problem. It is your task to determine how to find the true source of the problem and make changes to reduce expenses. The company uses fairly outdated software that does not outline financial issues to management. Profits have always been quite high in the past, so management hasn't paid much attention to financial measurements or details. They have not seen the need to scrutinize the data until now, since the company is witnessing shrinking profits. The finance manager has a multitude of spreadsheets outlining financial data, but anyone that wants to see that data must ask for a copy via e-mail. Products all have sku numbers, but is often difficult to know where products are located in the warehouse, how much raw material is available, and how much finished product is ready to ship to customers. Inventory levels are estimated by walking through the warehouse and physically looking at the shelves. It is also difficult to determine which customers are using which products. The company knows that ice fishing gear is sold to customers in the North and salt water gear is typically sold to customers in near the gulf coast, but otherwise, the company has little information about customer purchasing habits. After digging through spreadsheets for two weeks, you have discovered that the cash cycle is much higher than your competitors. The cash cycle is 64 days and most competitors are near 28. You have also ran across many stockouts. Ordering costs and warehousing kctcs.edu/ultra/courses/_493627247_1/cl/outline 1/2 backspace Y Content costs are quite higher than other competing companies. After a quick look at the income statements and balance sheets, you have noticed a remarkably low ROA. You are the only person in the company that has this data because the information has not been easily available. For this project, you will submit a report to the management team at your company outlining the following: 1. How do companies know if their supply chain is inefficient or efficient? How should companies manage performance? What kinds of measures are important? Why is performance management important at all? 2. What steps should Frabill take to better manage performance? Technology upgrades? Software? New employees? Use a third party provider? Hire a consultant? 3. Given the findings, what can Frabill do to reduce expenses and increase profits? What can Frabill do to decrease the cash cycle, decrease stock outs, and increase return on assets? How can they increase other noted ratios? Which is most important? What is the first thing that should happen? U